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Sunday, July 20, 2008

How important is nuclear power going to be in India’s future? Nobody knows for sure, since the future is full of uncertainties. But the nuclear option is a must for providing energy security. Manmohan Singh thinks nuclear energy will be absolutely vital for India’s energy future, and he might be right. His critics say nuclear power will never account for more than a fraction of India’s power needs, and will be the most expensive form of power. They may be right too. Today, the economic viability of nuclear power is far from proven. A detailed MIT analysis in 2003 suggested that nuclear power was distinctly more expensive than power based on coal or natural gas. But since then the prices of fossil fuels have gone through the roof. Many analysts fear that world oil production will soon peak, then plateau, and then decline inexorably. If so, oil will go over $500/barrel, and the prices of coal and natural gas prices will quadruple in tandem. That will make them very expensive for power generation. Meanwhile, the nuclear power industry argues that economies of scale can substantially reduce the cost of nuclear power. Nuclear power plants have high upfront capital costs, but low running costs. If they are built without cost or time overruns, nuclear power could be competitive with natural gas even at today’s prices. In the ’70s, nuclear plants in the US were plagued with huge delays and cost overruns. A third generation nuclear plant, currently being built in Finland, has run into similar problems. Yet, France, which gets three-quarters of its electricity from nuclear power, has shown that once production is standardised and plants are built on time, nuclear power is competitive. Fourth generation power plants are now on the drawing board, and could further improve the economics of nuclear power. Coal is easily the cheapest option for energy. But coal-based power produces massive greenhouse gases, and for that reason may have to be curtailed in future decades. DV Kapur, former power secretary and CEO of NTPC, also points out that various expert committees have judged that India’s extractable coal reserves may not last beyond four decades. The 2006 Expert Committee on Energy estimated India’s power needs at 960,000 MW by 2031-32, up from 144,000 MW today. This assumed a GDP growth rate of 9%, which is very optimistic. But if indeed India grows so fast, coal, hydel and non-conventional energy sources will meet at best 75% of India’s needs in 2030, and this proportion will keep declining as coal reserves deplete. This, says Kapur, leaves an energy gap of 240,000 MW in 2031-32, which is far more than India’s entire installed capacity today. Nuclear energy alone can fill this gap. The gap —and India’s need for nuclear energy — will keep rising in future decades. Kapur makes a strong, apolitical case for nuclear power. So do Kalam and several top nuclear scientists. Yet, it is possible that breakthroughs in solar or other forms of energy could make them cheaper and more easily accessible than nuclear power. History shows that technology can change in radical, unpredictable ways. I will be very happy if solar energy becomes the source of the future. It is available everywhere. It is renewable. It has none of the toxic, military or waste-disposal hazards of nuclear power. Recent advances in solar thermal technology show a lot of promise. Yet, nobody knows if the technology can be scaled up, work in cloudy countries, or overcome maintenance issues. In sum, we face messy uncertainty today. Nuclear energy could be our only long-term saviour. But it could also be rendered irrelevant by the advance of solar or other energy sources. In such circumstances, we need to keep all options open, aim for a mix of energy sources, and try to be at the leading edge of all technologies. An important but little discussed part of the Indo-US nuclear deal is that it will enable India to participate in the international effort to develop fourthgeneration nuclear power plants. The Indo-US nuclear deal offers some immediate benefits. Existing nuclear power plants are running at half their rated capacity for want of fuel, and fuel imports will overcome the problem. Dual-use technologies will more easily be importable after the nuclear deal, greatly improving India’s technological access. But it takes up to 10 years to build a greenfield nuclear power plant, so the greatest benefits of a big nuclear push lie far out in the future. The main case for nuclear power is a long-run one, to provide energy security. India needs to be at the cutting edge of this industry in case other power sources become unviable, making nuclear power absolutely essential. And to be at the cutting edge, India needs the Indo-US nuclear deal to end its technological isolation. For conventional defence security, we maintain various options at considerable cost. For similar reasons, we need to push ahead with nuclear power, even if the immediate cost-benefit ratio is unclear. It is an essential energy security option for the long run.